AMD Stock Soars 25% After Chipmaking Deal with OpenAI

OpenAI just struck a massive deal with AMD that could give the ChatGPT maker up to 10% ownership in the chipmaker. The partnership centers on AMD supplying up to 6 gigawatts of processing power through its Instinct graphics chips over several years, with the first gigawatt going live in the second half of 2026.

The market responded immediately. AMD's stock jumped over 25% in pre-market trading Monday after the announcement. This marks one of the largest GPU deployment agreements in the AI industry so far.

Here's how the deal works: AMD issued OpenAI warrants to buy up to 160 million shares of common stock. But OpenAI can only exercise these warrants as it hits specific deployment and performance milestones. The first batch of shares becomes available once that initial gigawatt of capacity goes online, with additional tranches unlocking as they scale up to the full 6 gigawatts.

OpenAI didn't reveal the exact dollar amount, but they're calling it a multi-billion dollar deal. That puts serious money behind AMD's push to compete with Nvidia in the AI chip space.

The timing matters for both companies. OpenAI needs massive computing power to train and run its AI models, but Nvidia's chips have been in short supply and expensive. AMD gets a major customer commitment that validates its AI hardware and potentially brings in a strategic partner as an investor.

For AMD, this represents their biggest break into the AI training market that Nvidia has dominated. The company has been trying to position its Instinct chips as alternatives to Nvidia's H100 and newer models, but needed a major customer to prove the technology works at scale.

Sam Altman, OpenAI's CEO, said AMD's leadership in high-performance chips will help them "accelerate progress and bring AI benefits to everyone faster." But the real test comes in 2026 when the first systems need to actually deliver the performance OpenAI expects.

The deal also shows how AI companies are diversifying their chip suppliers. Relying entirely on one vendor creates risks when demand is this high and supply chains can get disrupted. OpenAI gets more options, while AMD gets the revenue certainty to invest in better chips.